This month sees a drop of 2.6% (-£6,407) in the asking prices of properties coming to market, following the now familiar post-credit-crunch pattern of falls in November.
However, this is the least severe November fall since 2009 and still leaves prices 2% (+£4,617) ahead of where they were this time last year – the highest annual rate of increase achieved in November for five years.
London continues to buck the national trend, but, even with the large lift in London prices removed, the rest of the country is broadly stable (+0.2%) year-on-year. This, alongside some favourable signs from other lead indicators, suggests a somewhat brighter outlook for 2013 as we enter the traditional winter slowdown.
Miles Shipside, director and housing market analyst at Rightmove comments:
“Though the market remains patchy and national statistics are given a gloss by a buoyant London market, there are a number of positive trends that justify cautious optimism as the market enters its’ winter recess. Outside the capital, agents report prices are broadly flat in many parts of the country compared to a year ago. This stability may indicate a sounder springboard for 2013 as the wait goes on for a sustainable recovery in transaction numbers.”
Many home-owners see the new year as an ideal time to place their property on the market. Whilst average stock for sale has fallen from 75 properties per estate agency branch a year ago to 71, competition among sellers for mortgage-ready or cash buyers looks set to remain fierce in many markets. One option for sellers is to prepare their property for sale by spending a few thousand pounds, offering prospective buyers a ‘ready to move into, little to do’ experience. With many buyers having put their cash towards raising a deposit, they have little to spend on improvements when they move in. However, Rightmove research found that only 17% of sellers stated they were definitely willing or able to spend on a ‘make-over’ even if they stood to gain financially by achieving a considerably higher price. As well as the ‘hassle factor’ of home-improvements, this also reflects many sellers’ lack of access to funds to carry out what would be financially astute improvements. It also highlights one of the legacies of the downturn with many sellers suffering from shrinking equity pots, limiting their ability to raise relatively small lump sums.
“Diminished or negative equity is a Catch-22 for sellers, as it potentially deters them from making the investment to increase the value and sale-ability of their property and maximise their gains or cut their losses. Agents report that properties that are closest to ‘showhome condition’ and ready to move into are selling more easily and achieving the highest prices, as buyers have little spare cash for improvements. Those sellers that can attempt a mini-makeover as a tactic in 2013 should consider putting some DIY products on their Christmas list.”